Markets are eagerly awaiting US CPI data to be released later today, predicting a decline in the annualized rate from 3.5% to 3.4%.
➡️ The most important macroeconomic data in the market will be released today: the US consumer price index (inflation), which is expected to show a decline in the annualized rate from 3.5% to 3.4%, based on a month-over-month increase of 0.4%. . If the data were to be lower than expected, since the main US and global stock indexes already appear bullish, we could see a strong rally in stock markets leading to new record highs. If higher than expected, we can expect a sell-off in stocks and a sharp rise in the US dollar.
➡️ The major US stock market indexes are already advancing in a bullish way towards all-time highs, after the MSCI All Country World index closed at all-time highs on Tuesday. The rise is believed to be due to the companies of the S&P 500 index report higher-than-expected corporate profits, beating market expectations. Day traders they might consider trading major US stock indexes on the long side. If US inflation is low, we could easily see it reach record highs.
➡️ Fed Chair Jerome Powell said yesterday that the Fed needs to see more evidence of cooling inflation before cutting rates, calling for patience. US PPI data released yesterday was significantly higher than expected, rising 0.5% month-on-month when only 0.3% was expected, suggesting inflationary pressure on the sell-side remains persistent.
➡️ In the Forex market , the main story is continued weakness in the Japanese yen, so Forex traders may want to look for short yen trades in the near term. Today's release of US Consumer Price Index data will likely produce volatility in the US dollar and make trading more attractive, especially if the data is somewhat surprising.
➡️ They and silver they rose yesterday, with silver looking more bullish. Both are not far from significant high prices.
➡️ Copper futures continue to rise to new 2-year high prices, so they will be interesting for trend traders on the long side.
➡️ The following key data will be released later today:
- US retail sales
- US Empire State Manufacturing Index
- Australian unemployment rate
➡️ Yesterday's data for change in UK claimant count (unemployment claims) was slightly better than expected.
Credit by DailyForex.com